David Cameron and Jeremy Hunt have been exonerated by Lord Justice Leveson's report into the press, despite widespread criticism they were too close to News International.
Responding to the news, Cameron told MPs those who alleged the Conservatives had done a deal with Murdoch - including former Labour prime minister Gordon Brown - should apologise.
He endorsed the report but said he had "serious concerns" of any statutory underpinning of the media, clearing the way for a split in the coalition about how to respond to the Leveson Inquiry.
Ed Miliband has said the Labour "unequivocally supports" the inquiry's recommendations.
The Leveson Inquiry's report said there was "no evidence" of any deal between Cameron and Murdoch - and cleared him of impropriety.
"The evidence does not, of course, establish anything resembling a 'deal' whereby News International’s support was traded for the expectation of policy favours," the report said.
"All of those involved strenuously deny that there was a deal whether express or implied. The documents do not gainsay them. Nor do the coalition government’s actions in government," Leveson notes of the prime minister.
However the report does note Cameron went to "great lengths" to woo the Murdoch's.
In the report Leveson also points out that former News International chief executive Rebekah Brooks - who sent Cameron text messages saying they were "in this together" - was aware of Andy Coulson's appointment as Cameron's press chief while the Conservatives were in opposition.
Vince Cable, however, was criticised for the incident in December 2010 when he told two undercover journalist he had declared "war" on Rupert Murdoch.
Leveson said the "unguarded remarks" created the "appearance of bias."
Brooks and Cameron went to the same "mulled wine, mince pie" party on Boxing Day during that same month.
The report said News Corp's bid to take control of BSkyB came to Jeremy Hunt's department "in a crisis not of their making" following Murdoch's action.
Despite Leveson hearing about Hunt's extensive text contact with News Corp's lobbyist Frédéric Michel, the report praises Hunt's objectivity.
Hunt comes into criticism for failing to supervise his special adviser Adam Smith, creating a "serious hidden problem" in the Government's handling of the affair.
The report argues Smith failed to ensure Cabinet Office "guidance on quasi-judicial decision making" was followed when he was "faced with the intimacy, charm, volume and persistence" of Michel.
On the appointment of Andy Coulson, who appeared in court in relation to charges surrounding corruption of public officials on the same day the report was published, Leveson questions why George Osborne approached a man who had published reports of him socialising with a prostitute.
"It was Mr Osborne who proposed that Mr Coulson should be approached. At first glance, it might be thought surprising that Mr Osborne should have made this particular suggestion.
"As the editor of the News of the World (NoTW), Mr Coulson had been responsible for a damaging front page headline about Mr Osborne: “TOP TORY, COKE AND THE HOOKER," the report notes.
He adds the jailing of one of the News of the World journalists over phone hacking could lead to questions about why Osborne wanted to appoint Coulson.
"That Mr Coulson had resigned in response to the conviction and imprisonment of one of his journalists added yet another reason to question why it was that Mr Coulson’s name came to Mr Osborne’s mind."
Leveson says the relationship between politicians and the press has been too close "over the last 30-35 years, and probably much longer."
However he says relations between politicians and the press should not "give rise to any legitimate public concern."
And he said politicians of all parties had developed “too close a relationship with the press in a way which has not been in the public interest”.
The judge said the press had ignored its own code of conduct in a way that had “wreaked havoc with the lives of innocent people” on far too many occasions over the last decade.
He said there had been a “recklessness in prioritising sensational stories”, irrespective of the harm that may be caused.
Lord Justice Leveson today called for legislation to underpin a "genuinely independent and effective system of self-regulation" for the press.
In his report on press standards and ethics, Lord Justice Leveson has called for legislation to provide “an independent process to recognise the new self-regulatory body and reassure the public that the basic requirements of independence and effectiveness were met”.
|@ JGForsyth : Does the Leveson report come under one in, one out? If the coalition regulates newspapers, does it have to de-regulate another industry?|
|@ politicshomeuk : Sir Ming Campbell says there's "a division of opinion in the Coalition, a division of opinion in the Conservative party" on #leveson.|
|@ iankatz1000 : In case u missed, must-read @emilybell: "Leveson cannot deal with is the regulation of the press in the 21st century" http://t.co/sgMlFSHv|
|@ JohnHigginson : The Leveson report is so long it comes in a BOX (at least 5in thick) Arrrgh! #leveson|
Journalists are getting ready for the Leveson lock-in. They will have an hour to read the report before it is published.
|@ SophyRidgeSky : Hope my speed reading is up to scratch. Leveson report said to be 2,000 pages. @amberelliottsky tells me I need to read 16 pages a minute.|
|@ johnprescott : "Time Gentlemen Please" - My exclusive blog for @LabourList ahead of the #Leveson statement http://t.co/t4O93f2U|
Labour's shadow leader of the Commons Angela Eagle makes fun of the fact Cameron and Clegg are making separate statements. "What on earth is happening to collective responsibility?" she asks.
Noting that the play Yes Prime Minister had come to an end, she added: "There is at least still be one farce running in Whitehall."
The government has confirmed that Nick Clegg will deliver his own statement on the Leveson Report after the prime minister.
|@ thomasbrake : Getting one of my rare outings at the Dispatch Box today, safe in the knowledge that anything I say will be buried by Leveson!|
|@ georgeeaton : This week's @NewStatesman leader on #Leveson: state regulation of the press is neither just nor necessary http://t.co/RvnB7Y1o|
|@ Mike_Fabricant : Everyone has a strong view on Leveson's 2000 page report except, errrr, they haven't even read it yet. Give Brian a break!|